Business Directories

Qantas to resume flights after govt intervenes

Sydney, October 31, 2011

Australia's Qantas Airways scrambled to get its planes in the air on Monday after grounding its entire fleet over the weekend in a bold tactic to force the government to intervene in the nation's worst labour dispute in a decade.

Qantas took the drastic step to ground all flights on Saturday, disrupting 70,000 passengers and spurring the government and its labour-market regulator to seek a quick end to hostilities between the airline and unions.

At the government's instigation, Australia's labour tribunal ordered Qantas to resume flights and banned trade unions, which have waged a damaging campaign of industrial action, from staging more strikes.

"That was the only way we could bring that to a head," a bleary-eyed Qantas CEO Alan Joyce told reporters after 36 hours of round-the-clock brinkmanship.

Joyce was dubbed a "kamikaze" by one newspaper for effectively staging his own strike against the unions. The share market judged him the winner, driving Qantas shares up as much as 7.4 percent. In afternoon trade, the stock settled at A$1.61, up 4.2 percent.

The tribunal ruling, handed down in the early hours of the morning, gives both sides 21 days to settle the dispute or submit to binding arbitration -- an expedited process likely to favour Qantas in its battle with unions to cut costs and base more operations in Asia, a labour-law expert said.

"I think that will give Qantas a victory," said Ron McCallum, professor of industrial law at Sydney University.

Qantas says it has lost about A$70 million ($75 million) since September from industrial action in its dispute with three trade unions over pay, working conditions and its Asian plan. Joyce had described the union campaign as "death by a thousand cuts" for the 90-year-old airline.

The aviation regulator said it would clear Qantas flights to resume from 3pm local time (0400 GMT), though full operations were not expected to be restored until Wednesday.

In Australia, Qantas departure lounges were crammed with passengers hoping to board the first flights. In downtown Sydney, businessman Michael Williams said he felt Joyce might have overplayed his hand. "It's a very Machiavellian move and it'll damage the reputation of Qantas," Williams said.

The grounding also stirred media speculation of Qantas as a potential takeover target, with a Sydney Morning Herald columnist accusing Joyce of driving "Qantas's share price into the ground, making it a sitting duck for a takeover".

The government welcomed the tribunal's ruling, saying it had saved the tourism industry and the wider economy further from serious harm, but it turned its anger on the Qantas CEO.

Prime Minister Julia Gillard said the grounding was an extreme step and criticised Joyce for giving the government only three hours notice before grounding the airline, which carries about a fifth of Australia's international passengers.